IT was a sea of bright, colourful lights and floating snowflakes as Sovereign Hill was transformed into a magical winter wonderland.

Hundreds of people got into the festive spirit early and flocked to Ballarat's iconic tourist attraction on Friday night, to catch a glimpse of a world-class light show which launched the museum's Christmas in July program.

The Christmas Wonder Lights Show was developed by The Electric Canvas, an award winning projection company that assisted in the making of White Night Melbourne and Vivid Sydney.

The winter chill had set in for the night and rugged up in their winter warmest children clad in woollen beanies and hooded coats danced among the falling snow, while others perched on their parents' shoulders to catch a better glimpse of the light show.

The street was lined with Christmas lights and Victorian-style Christmas trees and decorations.

Bells rang and a Victoria style choir sang traditional Christmas carols as the dazzling light show was unveiled.

Images celebrating the festive season and Sovereign Hill's star attractions were projected onto museum buildings along Main Street.

Ballarat mother of two Jacinta Kitson attended the launch with her two children Pearl,7, and Rudy,9.

"It has been absolutely breathtaking," she said.

"It is the type of thing you cannot describe or capture in a photograph.

"The falling snow, the beautiful lights and just the positive feeling among people who a sharing the moment with you.

"It was an amazing show."

Ms Kiston said she had also been impressed by the free Christmas gifts placed under trees that had been distributed to children.

"All the little touches and surprises they have put into this show have been wonderful and you can just look around and see how much all the children are enjoying it," she said.

Projection Designer and Technical Director at The Electric Canvas Peter Milne said endless hours had been spent behind the scenes in the last five weeks to ensure the light show came to life.

Mr Milne and his team spent days at the museum figuring out where they could hide the hundreds of lights among the architecture.

"During the day Sovereign Hill is a historical museum so you don't want to see any modern technology," he said. "It was important for us to hide these lights into discreet areas to ensure a beautiful projection of images and magical show."

Mr Milne said he had been approached by the museum's director of marketing Garry Burns who had seen the company's light projection work at Light the Night Melbourne and the Vivid Sydney light show in May.

"Shortly after Vivid in Sydney we got a knock on the door and that's how it all started," he said.

This year, marks the museum's third Christmas in July.

Christmas Wonder Lights will run every night until July 13, from 5.30pm to 6.45pm each evening.